Analysis of the regulation of transcriptional control of osteoblast differentiation has significantly increased our knowledge about skeleton development, and the molecular bases of skeletal dysplasia. This analysis was initiated in the Principal Investigator's group using the promoter of the osteocalcin gene as a tool to identify osteoblast-specific cis-acting elements (OSEs) and osteoblast-specific transcription factors (OSFs). The fact that Cbfa1 was identified as a transcriptional regulator of osteoblast differentiation using the promoter as a tool justifies the use of this promoter to look for other transcriptional activators of osteoblast differentiation. The Principal Investigator has now identified another osteoblast cis-acting element termed OSE1, and has shown that its function is as important as the function of Cbfa1 binding site in regulating osteocalcin expression. Osf1, the nuclear activity binding to OSE1, has been purified and found to be present only in osteoblast nuclear extracts. Importantly, it is absent in nuclear extracts of differentiated osteoblasts suggesting that it may act up stream of Cbfa1. It is suggested that these biological and biochemical preliminary data are an incentive to identify Osf1 and the gene encoding it. There are four specific aims. Aim 1 is to demonstrate the functional importance of OSE1 in vivo and clone a cDNA encoding Osf1. Aim 2 proposes to demonstrate that recombinant Osf1 acts as a transcriptional activator through its binding to OSE1. Aim 3 proposes to study the pattern of expression of endogenous Osf1 during development and after birth, and its regulation of expression by secreted molecules affecting skeleton development. Aim 4 proposes to obtain an Osf1 genomic clone, perform chromosomal mapping, and design a vector to delete the gene through homologous recombination in embryonic stem (E.S.) cells.